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Top AI Penny Stocks to Watch in July 2025

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Written by Timothy Sykes
Updated 7/8/2025, 12:32 pm ET 5 min read

Artificial intelligence continues to dominate headlines — but some of the most explosive opportunities are flying under Wall Street’s radar. While large-cap names like Nvidia and Microsoft get most of the attention, there are several AI-focused penny stocks trading under $5 that are catching serious momentum.

For traders looking to take advantage of AI-driven volatility, these small-cap names are worth watching closely.

Here are three top AI penny stocks to watch now…

3 Top AI Penny Stocks to Watch in July

Stock TickerCompanyPerformance (YTD)
NASDAQ: SOUNSoundHound AI Inc.
NASDAQ: APLDApplied Digital Corporation
NASDAQ: IRENIris Energy Ltd

These aren’t stocks that I’m necessarily buying…

These are stocks that I’m watching.

Want my whole list of AI and quantum computing penny stocks?

10 Top AI and Quantum Computing Penny Stocks for July 2025

The following three picks I’m watching extra closely…

SoundHound AI Inc. (NASDAQ: SOUN) — Global Voice AI Adoption Builds

SoundHound AI is gaining traction as one of the leading voice interface companies in the world. Their technology supports over 25 languages and is used in vehicles, restaurants, and customer service settings.

Read more about SoundHound’s initiatives here!

The company recently announced major expansions, including a renewed deal with Tencent for auto integration, partnerships with Hyundai and Kia, and deployments across more than 13,000 restaurant locations. In Q1 alone, SoundHound’s voice engine processed over 2 billion queries.

The company’s latest enterprise platform, Amelia 7.0, is being adopted in verticals like telecom, healthcare, and financial services — positioning the company as a serious player in applied AI.

Why I’m Watching SOUN:

  • Real-world deployments across multiple sectors
  • Surging enterprise adoption
  • Room to run if momentum holds

Soundhound was one of the first runners in the AI era. Only price pays, but the stock’s legitimate growth is keeping it in play while other AI penny stocks have fallen to the wayside.

Applied Digital Corporation (NASDAQ: APLD) — From Hype to Sell-Off

APLD spiked in early June after announcing a $7 billion deal with CoreWeave to lease capacity at its North Dakota data center. The move quickly unraveled when regulatory filings revealed that CoreWeave had sold its entire stake in APLD, although the deal remains intact.

The stock has since fallen sharply, dropping over 30% from its highs. With continued uncertainty around profitability, APLD is now on watch for potential bounce setups or further downside continuation.

Why I’m Watching APLD:

  • Extreme volatility following massive hype
  • Still in the news cycle — traders watching for any reversal catalysts
  • One of the most talked-about AI penny stocks in June

This is a sentiment-driven setup. Until confidence is restored, every bounce should be treated with skepticism.

More Breaking News

Iris Energy Ltd (NASDAQ: IREN) — Dual Exposure to AI and Bitcoin Mining

Iris Energy has been one of the top-performing AI-related penny stocks in 2025. The company operates Bitcoin mining data centers but has recently shifted into the AI space by investing heavily in high-performance GPU infrastructure.

In June, IREN hit its 50 EH/s mining target, secured over 2,400 next-gen NVIDIA Blackwell GPUs, and launched Horizon 1 — a 50MW liquid-cooled AI data center project. It also completed a $550 million convertible note raise and posted record revenue of $65.5 million for the month.

Read more here!

While the company’s core revenue still comes from Bitcoin mining, its strategic push into AI compute gives it a speculative angle many traders are watching.

Why I’m Watching IREN:

  • Strong growth in both Bitcoin and AI segments
  • High-margin AI cloud services ramping fast
  • Speculative dual narrative with proven execution so far

IREN remains volatile and is sensitive to both AI sentiment and Bitcoin prices — but traders are paying attention.

* Past performance doesn’t indicate future results.

Final Thoughts: How to Approach AI Penny Stocks

AI is one of the most powerful trading narratives in the market right now — but not every stock with “AI” in the headline is worth chasing. The key is to find companies with real catalysts, momentum, and a history of responding to news.

These are not buy-and-hold plays. They’re trading vehicles. Have a plan, respect your risk, and stay disciplined.

Want an edge? My team and I have developed XGPT — an AI tool that helps identify high-odds trading setups faster than any human could. In markets this fast, every second matters.

Whether you like it or not, AI is part of modern trading. Other traders are already using it, shouldn’t you?

 


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Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”

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